Stock futures were sliding Friday, while the Mideast pushed oil prices higher and bond yields pulled back from record highs
Futures tied to the Dow Jones Industrial Average were down 18 points to 33,529, while the S&P 500 was off 3.50 points to 4,229.50 and the tech-heavy Nasdaq slipped 23 points.
Brent crude was up 1.24% to $93.53 a barrel, while West Texas Crude climbed 1.49% to $90.70, sparked by the Israel-Hamas war. Israel continues to signal they are moving toward a ground invasion of the Gaza Strip.
A U.S. Navy warship operating in the Middle East intercepted multiple projectiles near the coast of Yemen on Thursday, CNN reported.
The yield on the benchmark 10-year Treasury note stood at 4.935% early on Friday, falling back from the brink of 5% reached late Thursday, the first time it has traded above that level since July 20, 2007.
Stocks closed down Thursday amid the most aggressive bond market sell-offs in more than a year even as Federal Reserve Chairman Jerome Powell struck a neutral tone on rate hikes during a key policy speech in New York.
Powell remarks, which included a nod to softer inflation data set against the resilient domestic economy, suggest a further indication of the Fed’s “wait and see” stance on near-term rate hikes, following a series of data releases showing stronger-than-expected retail sales, a resilient job market and above-trend economic growth.
“Given the uncertainty in the outlook, markets are pricing in roughly a 30% chance the Fed will increase rates in December and if not in December, then a higher likelihood of an increase in January,” said Jeffrey Roach, chief economist for LPL Financial. “However, we believe the economy is slowing enough that the markets are overpricing the likelihood of more rate hikes.”
Roach noted that investors learned from the Beige Book “that business is slowing and delinquencies are picking up, indicating the economy is no longer on a strong growth trajectory.”
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